Precious metals support S&P GSCI in September

The S&P GSCI increased 0.17 per cent in September led by strength in the precious metals sector, according to Standard & Poor’s.

The S&P GSCI Precious Metals Index increased 6.49 per cent in September and has returned 16.19 per cent for the year.

Year-to-date, the S&P GSCI is up 4.68 per cent.

Energy was little changed in September, but the S&P GSCI Energy Index decline of 4.07 per cent acted as the biggest index drag during the quarter.

The S&P GSCI Industrial Metals Index, the best performing sector in 2009 with a year-to-date return of 56.83 per cent, gained 20.72 per cent during the third quarter.

“In addition to the mean reversion factor from 2008 and plenty of demand from China, many analysts have suggested that metals are gaining favor due to the low opportunity cost demand of dollar based metal investing from extremely low base rates,” says Michael McGlone, director of commodity indexing at Standard & Poor’s.

The S&P GSCI Enhanced Index ended September with a year-to-date gain of 12 per cent, despite a 0.94 per cent decline during the third quarter.

McGlone says: “2009 has been a year favoring enhanced strategies due to extreme contango conditions in some of the energy components.”

The S&P GSCI Agriculture Index ended September with a year-to-date decline of 6.77 per cent on the heels of a 1.92 per cent decline during the third quarter. Despite cheaper feed prices, the S&P GSCI Livestock Index was the weakest sector during the third quarter with a 5.75 per cent decline. Year-to-date, the index has fallen 16.58 per cent.